The flow of foreign indirect investment (FII) has helped increase the liquidity of the stock market as well as accelerate the equitisation of State-owned businesses and the issuance of government and corporate bonds, according to economic experts.
At a seminar entitled “Foreign investment in Vietnam in the post-crisis period” held in Hanoi on May 21, the participants said the FII flow has also created a new investment culture for domestic inexperienced investors, thus improving the financial market.
The active participation of foreign investors will make the stock market more synchronous, balanced and animated, they said.
According to Dr. Le Van Chau, President of the Vietnam Securities Business Association, Vietnam lacks a clear orientation on FII flow and policies to strengthen the state’s investment attraction while its financial market is under-developed with many hidden risks.
At present, authorised agencies can only control FII flows in the official stock market, he said.
To overcome these weaknesses, experts said Vietnam should have transparent FII attraction policies in the context of the international economic integration while actively taking preventive measures against the hidden risks of this investment.
During the 2008-2009 global financial crisis, the FII flow to Vietnam saw a standstill with only 13,000 transaction accounts, including over 1,200 accounts opened by foreign organisations and investment funds, said Nguyen Doan Hung, Vice Chairman of the State Securities Commission.
Foreign investors account for only 1.5 percent of the total investors in the country’s securities market, but are responsible for between 20-25 percent of total transaction volume./.
At a seminar entitled “Foreign investment in Vietnam in the post-crisis period” held in Hanoi on May 21, the participants said the FII flow has also created a new investment culture for domestic inexperienced investors, thus improving the financial market.
The active participation of foreign investors will make the stock market more synchronous, balanced and animated, they said.
According to Dr. Le Van Chau, President of the Vietnam Securities Business Association, Vietnam lacks a clear orientation on FII flow and policies to strengthen the state’s investment attraction while its financial market is under-developed with many hidden risks.
At present, authorised agencies can only control FII flows in the official stock market, he said.
To overcome these weaknesses, experts said Vietnam should have transparent FII attraction policies in the context of the international economic integration while actively taking preventive measures against the hidden risks of this investment.
During the 2008-2009 global financial crisis, the FII flow to Vietnam saw a standstill with only 13,000 transaction accounts, including over 1,200 accounts opened by foreign organisations and investment funds, said Nguyen Doan Hung, Vice Chairman of the State Securities Commission.
Foreign investors account for only 1.5 percent of the total investors in the country’s securities market, but are responsible for between 20-25 percent of total transaction volume./.
